PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) II. Board Composition (Cont’d)
Nomination Committee
The Nomination Committee was established on 26 April 2005 and is primarily responsible for the identification of the desired mix of expertise, competencies and experiences for an effective Board and the assessment of the performance of the members of the Board. As and when the need arises, the Nomination Committee shall also identify and recommend candidates with the necessary qualities to strengthen the Board.
On appointment of new Directors, the Management would facilitate the Directors’ induction by providing the Directors with relevant information about the Group and encouraging them to visit the sites of the Group’s operating units and meet with key senior executives. The Nomination Committee will also ensure that orientation programme is provided for new members of the Board and is also tasked to review the Directors’
continuing education programmes.
In accordance with the Company’s Constitution, all Directors who are appointed by the Board are subject to election by shareholders at the first opportunity after their appointment. The Constitution also provides that at least one third (1/3) of the remaining Directors be subject to re-election by rotation at each Annual General Meeting (“AGM”) provided always that all Directors shall retire from office at least once every three (3) years but shall be eligible for re-election.
The Nomination Committee has access to any form of independent professional advice, information and the advice and services of the Company Secretary, if and when required, in carrying out its functions. Directors seeking re-election and re-appointment abstain from all deliberations regarding his/her re-election and re- appointment to the Board and/or Board Committees. The Nomination Committee shall meet at least once in a financial year or more frequent if needed.
The activities carried out by the Nomination Committee during the financial year under review were as follows:
• Assessed and reviewed the boardroom diversity in respect of the desired mix of skills, competencies and experience of the Board, including the core competencies which non-executive directors should bring to the Board as well as the gender diversity policy as encouraged by Bursa Securities;
• Assessed the effectiveness and performance of the Board and the Board Committees;
• Reviewed the succession plan; and
• Review the Directors’ continuing education programmes.
Directors’ Training
Under the Listing Requirements, the Nomination Committee has assumed the onus of determining or overseeing the training needs of the Directors. All the Directors have attended the Mandatory Accreditation Programme.
During the financial year ended 31 December 2020, all Directors have attended relevant courses and training programmes to enhance their knowledge to effectively discharge their duties and obligations.
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) II. Board Composition (Cont’d)
Directors’ Training (Cont’d)
The courses and training programmes attended by the Directors are as follows:
Name of Director Courses/Training Programmes Attended
Tan Ah Lai Corporate Liability Act-Defence for Directors, Executives & Company Corporate Liabilitiy on Corruption under Section 17A of the Malaysian Anti-Corruption Commission Act 2009 (amended 2018)
National Tax Conference 2020 2021 Budget Seminar
Tay Hoe Lian Managing Business In Crisis
Report of the MIER National Economic Outlook 2020/2021 Understanding Section 17A and Corporate Liability
Tay How Sik @ Tay How Sick Corporate Liability Act-Defence for Directors, Executives & Company Hia Cheng Corporate Liability Act-Defence for Directors, Executives & Company Ang Nyee Nyee Executive Certificate in Islamic Finance by INCEIF
Artificial Intelligence and Intellectual Property
The Principles and Importance of Public Services Productivity Measurement by Malaysia Productivity Corporation (MPC) in collaboration with Public Service Department Malaysia (JPA)
Budget Proposal Outlook on M&A, Issues Affecting Investments/
Business and the Proposed Amendments to Tax Law
Nurulhuda Binti Abd Kadir Stand Up For Yourself Developing Assertiveness Skills For The Workplace
YBhg Dato Dr. Mohamad Musa bin Md. Jamil
(Resigned w.e.f 15 April 2021)
Corporate Liability Act-Defence for Directors, Executives & Company
YBhg Datuk Tay Puay Chuan
(Resigned w.e.f 15 April 2021) The impact of the current pandemic on MFRS 16 Leases
Corporate Liability Act-Defence for Directors, Executives & Company The Directors are mindful that they shall continue to undergo the relevant training programmes in order to stay abreast with the latest developments in the industry and to better enable them to fulfill their responsibilities.
The Company Secretary and external auditors have also regularly updated the Directors on the latest relevant regulatory requirements and accounting standards to enable them to keep abreast with such developments and amendments.
CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONT’D)
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) III.Remuneration Directors’ Remuneration The details of Directors’ remuneration payable to the Directors of the Company for the financial year ended 31 December 2020 are as follows: Group (RM’000)Company (RM’000) FeesSalaries & AllowancesBonusesPerformance Incentive EPF & SOCSO Benefits- in-kindFeesSalaries & Allowances Bonuses EPF & SOCSO
Benefits- in-kind Executive Directors Tay Hoe Lian1801,8213,2882,69028228––––– Tay How Sik @ Tay How Sick1809971,819-4417––––– Hia Cheng1801,8833,0402,48820576––––– Non-Independent Non-Executive Director YBhg Dato Dr. Mohamad Musa bin Md. Jamil (Resigned w.e.f 15 April 2021)
––––––751––– Independent Non-Executive Directors YBhg Datuk Tay Puay
Chuan (Res
igned w.e.f 15 April 2021)
––––––512––– Tan Ah Lai––––––632––– Ang Nyee Nyee––––––12–––– Nurulhuda Binti Abd Kadir––––––9––––
PRINCIPLE A: BOARD LEADERSHIP AND EFFECTIVENESS (CONT’D) III. Remuneration (Cont’d)
Key Senior Management’s Remuneration (Cont’d)
The details of Key Senior Management’s remuneration in successive band of RM50,000 for the financial year ended 31 December 2020 are as follows:
Band Number of Key Senior Management
RM600,001 – RM650,000 1
RM1,150,001 – RM1,200,000 1
RM2,750,001 – RM2,800,000 1
RM3,350,001 – RM3,400,000 1
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT I. Audit Committee
Uphold Integrity in Financial Reporting by Company
The Board aims to provide and present a clear, balanced and comprehensive assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements and quarterly announcement of results to shareholders, as well as the interview with the Managing Director/Chief Executive Officer and review of the Group’s operations in this Annual Report.
The Board, with the assistance of Audit Committee, is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Group and the Company as at the end of the reporting period and of their results and cash flows for the period then ended. In preparing the financial statements, the Directors ensure that accounting standards approved by the Malaysian Accounting Standards Board in Malaysia and the provisions of the Companies Act 2016 are complied with and reasonable and prudent judgments and estimates have been made. The Directors’ overall responsibilities also include taking such steps as are reasonably open to them to safeguard the assets of the Group and for the implementation and continued operation of adequate accounting and internal control systems for the prevention of fraud and other irregularities.
The Board is satisfied that it has met its obligation to present a balanced and understandable assessment of the Group’s position and prospects in the Directors’ Report and the Financial Statements set out in this Annual Report.
II. Risk Management and Internal Control Framework Recognise and Manage Risk of the Group
The Board recognises its responsibility over the principal risks of various aspects in the Group’s business.
The Board and Management are mindful of measures required to identify risks residing in any major proposed transactions, changes in nature of activities and/or operating environment, or venturing into new operating environment.
CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONT’D)
PRINCIPLE B: EFFECTIVE AUDIT AND RISK MANAGEMENT (CONT’D) II. Risk Management and Internal Control Framework (Cont’d)
Recognise and Manage Risk of the Group (Cont’d)
The responsibilities of identifying and managing risks are delegated to the respective Head of each business units. A Risk Management Committee was established on 24 August 2020 and is responsible in assisting the Board by taking the responsibility of monitoring the effectiveness of the Group’s approach on risk management which function was previously delegated to the Audit Committee. The composition and details of activities carried out by the Risk Management Committee are set out in the Risk Management Committee Report of this Annual Report.
The key features of the risk management and internal controls are set out in the Statement on Risk Management and Internal Control as stated on pages 62 to 67 of this Annual Report.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS
I. Communication with Stakeholders Ensure Timely and High Quality Disclosure
An essential aspect of an active and constructive communication policy is the promptness in disseminating information to shareholders and investors. The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures pertaining to the Group to the regulators, shareholders and stakeholders of the Company.
The Company acknowledges the need for investors to be informed of all material business and corporate developments affecting the Group.
The timely release of quarterly results of the Group and the issue of the Company’s Annual Reports provide regular information on the state of affairs of the Group. These, together with the announcements to Bursa Securities, circulars to shareholders and, where appropriate, ad-hoc press statements and interviews are the principal channels for dissemination of information by the Company to its investors, stakeholders and the public generally. This information is also accessible by the public through the Bursa Securities’ website at www.bursamalaysia.com.
In addition, the Company’s website at www.gcbcocoa.com provides information on the Group’s business, corporate development and announcements to Bursa Securities. Other information relevant to shareholders and investors such as Annual Reports, circulars to shareholders and quarterly reports are available for download at the Company’s website.
Promoting Sustainability
The Company manages its business responsibly by managing the economic, social and environmental aspects of its operations. The Company produces the annual report, which highlights the financial aspects of the business and provides a clear, comprehensive and transparent representation of the Company’s performance annually.
PRINCIPLE C: INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS (CONT’D)
II. Conduct of General Meetings Annual Report and General Meetings
The Company recognises the importance of maintaining transparency and accountability to its shareholders.
The Board ensures that all the Company’s shareholders are treated equitably and the rights of all investors, including minority shareholders, are protected. The Board provides its shareholders and investors with information on its business, financials and other key activities in this Annual Report and the contents of which are continuously enhanced to take into account the developments, amongst others, in corporate governance.
In terms of conduct of meeting, the Board is cognisant of the advantages of poll voting at general meetings to ensure accurate, transparency and efficiency of the voting process and outcomes at general meetings. All the resolutions tabled at the Annual General Meeting are voted by poll.
COMPLIANCE STATEMENT
The Board is pleased to report that this Statement together with the Corporate Governance Report (“CG Report”) which is available on the Company’s website at www.gcbcocoa.com provides the corporate governance practices of the Company with reference to the MCCG. The Board considers and is satisfied that the Company has fulfilled its obligations under the broad Principles as set out in the MCCG. However, the Board has reserved several of the Practices and has rationalized and provided justifications for the deviations in the CG Report. Nevertheless, the Company will continue to strengthen its governance practices to safeguard the best interests of its shareholders and other stakeholders.
This Statement was approved by the Board on 15 April 2021.
CORPORATE GOVERNANCE OVERVIEW STATEMENT (CONT’D)
INTRODUCTION
Paragraph 15.26(b) of the Listing Requirements requires the Board of Directors (the “Board”) of any given Listed Issuer to include in its annual report a Statement on Risk Management and Internal Control. The Board is pleased to provide the following statement that is prepared in accordance with the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers (the “Guidelines”) endorsed by Bursa Malaysia which outlines the nature and scope of the risk management and internal controls of the Group during the financial year under review until the date of approval.
BOARD’S RESPONSIBILITY
The Board is committed to the continuous improvement of internal controls and risk management practices within the Group to meet its business objectives. The Board affirms its overall responsibility to maintain a sound system of internal controls and effective risk management, and for reviewing the adequacy, integrity and effectiveness of these systems to safeguard shareholders’ investment and the Group’s assets. It covers not only financial controls but operational and compliance controls, and risk management.
However, such systems, by their nature, can only provide reasonable, but not absolute, assurance against material misstatement, losses or fraud. These systems were designed to manage, rather than eliminate, the risk of failure to achieve business objectives of the Group.
RISK MANAGEMENT FRAMEWORK
In dealing with its stewardship responsibilities, the Board recognises that an effective risk management is part of good business management practice. The Board acknowledges that all areas of the Group’s activities involve some degree of risk and is committed to ensuring that the Group has an effective risk management framework which will allow the Group to be able to identify, evaluate, monitor and manage risks continuously that affect the achievement of the Group’s business objectives.
This process is regularly reviewed by the Board. It is intended that any key risk or significant control failings or weaknesses shall be identified and discussed in these reports including the impact they have had or may have on the Group and the actions to rectify them.
The key elements of the Group’s Risk Management Framework are described below:
• Structure
The Group adopts a decentralised approach to risk management which comprises strategic and operational risks (including financial and compliance risks).
Type of Risks Accountability
Strategic risk The Board, Group Chief Executive Officer (“CEO”), Group Chief Financial Officer(“CFO”) and Group Chief Operating Officer (“COO”)
Operational risk (including financial and
compliance risks) Senior Management and Head of Department
Strategic risks are risks primarily caused by events that are external to the Group, but have a significant impact on its strategic decisions or activities. Accountability for managing strategic risks therefore rests with the Board, Group CEO and Group CFO. The benefit of effectively managing strategic risks is that the Group can better forecast and quickly adapt to the changing demands that are placed upon the Group. It also means that the Group is less likely to be affected by some external event that calls for significant change.